April 30, 2021
2021: The Year of the Luxury Home
2021 has proven to be a strong real estate market with homes being purchased extremely fast and for above asking. This longevity is predicted to remain in the following months, especially in the luxury home market. Luxury homes are a smash hit in the 2021 real estate market. With more luxury homes on the market than any other category of home luxury buyers has an increased offering.
According to Redfin, luxury home sales have risen 41.6% in the first quarter of 2021 in comparison to the previous year. Breaking this down further, the median sale price of the luxury home market is around $975,000. This is a 14.7% increase from the first quarter of 2020 (Redfin). When analyzing the entire market, the mid-priced home market has risen 5.9% and affordable homes 7%. There is evident success in any given market, yet strong trends show the immense success of luxury living.
The pandemic has offered a unique set of circumstances where homes double as a workspace and entertainment area. The layout and amenities of our homes have become increasingly important to buyers. Trends have shown that buyers want larger backyards and outdoor spaces and are willing to pay the price for them. Additionally, with remote work an option many individuals have chosen to relocate to areas that previously would not have been possible. This is evident in cities such as Miami, San Jose, and Oakland as their real estate market has done exceptionally well.
In such a competitive market offering has been slim for much of the market. This is wonderful leverage for sellers as their homes are selling lightning-fast and for listing price or above. In terms of the luxury market listings are down 5.1%, yet this is a small percentage in comparison to affordable homes. This has incited fear in many mid-range market sellers as they are hesitant to put their homes on the market as there is uncertainty that they would be able to purchase another home in their price range. Luckily for the luxury market, this is not an overwhelming issue. There is a larger number of homes available to luxury buyers.
Luxury homes have been outperforming other markets in sales volume, yet trends have shown that luxury homes typically are on the market for a longer period of time. It is important to have a knowledgeable realtor who is well versed in the luxury market to guide you through your search!